White label casinos have become popular in the UK for many reasons. To begin with, they’re easier to launch than standalone casinos. Moreover, the risk of running one is often lower. Recent trends suggest a potential new route for some brands within the industry.
In Q3 2019, FSB was reviewed by the UK Gambling Commission after voluntarily suspending Blackbet Casino. Not long before that, ad violations on its 1xBet brand were reported by the Sunday Times. Meanwhile, EveryMatrix had its UK B2C licence suspended. As a result of this, it ceased its white label operations here.
Then, heading into the first month of 2020, Nektan fulfilled a long-standing desire to sell its B2C operations and adopt more of a B2B focus.
The above gives some food for thought. Are we seeing the beginning of the end for UK white label casinos? And will similar patterns emerge in other markets? Let’s dive deeper into the matter.
Why did white labels become popular and problematic?
The easy set-up process for white label casinos makes them attractive for businesses looking to achieve high website rankings and large player volumes quickly. Therefore, it’s not surprising that the speed of new UK casinos coming to market has accelerated.
But some brands have adopted an unsustainable ‘churn-and-burn’ mentality, launching multiple websites in a short space of time. In such cases, there is often little emphasis on player retention. So, until the end goal of selling these sites is achieved, it’s easy to enter an endless cycle of needing to attract new depositing players for survival.
Operating multiple white label casinos can also become overwhelming, because you’re responsible for everything. That includes recruiting affiliates, marketing, and so on. Having to juggle so many tasks leaves little room to think about long-term progress, which could lead to stagnation.
Brands that run white label casinos are responsible for all of their compliance too. The UK Gambling Commission reiterated this message in September 2019, also mentioning that these duties “cannot be transferred to any other party”. Having to measure multiple sites could explain why some of FSB’s brands were found to be guilty of improper practices, especially related to player bonuses.
Where is the industry going now?
Some white label casino developers are now moving away from the B2C route, shifting their attention towards supplying software and games for other brands. Removing a chunk of the tasks that come with operating their own casinos provides more room for these companies to develop higher-quality products for the industry. Meanwhile, operators benefit from being able to focus more on their strengths: player acquisition and retention, as well as marketing.
Choosing a narrower focus also opens new doors for innovation. Through having more time on their hands, brands can focus on identifying current gaps and filling these with exciting new gadgets and ideas. This results in more interesting features to enhance player experience, along with inspiring their competitors to think outside the box too.
Can we expect to see trends in similar markets?
Along with a shift in focus in the UK, EveryMatrix has also pulled its B2C operations from Denmark. However, it’ll continue to provide B2B services here. Online gambling tax rates will be increased by 8% from 2021, so more brands might adopt a similar approach. Some, on the other hand, might instead prefer to streamline how many white label casinos they operate. This would allow them to adopt a narrower focus, leading to better offerings and an enhanced player experience.
Sweden might see similar trends to the UK and Denmark as well. Since re-regulating at the start of 2019, regulation has been a talking point. SafeEnt, for example, has its B2C licence revoked and Ninja Casino brand suspended last summer. In a bid to remain compliant with laws here, other developers may opt to reduce their number of white label casinos.
Tying in with this, the move towards B2B might take a hold here too. River iGaming launched Casonic in Sweden last May, but has since moved away from B2C in all of its markets. The company believed that better business opportunities lie within B2B, and others might follow suit if Spelinspektoren imposes stricter laws.
Although they remain popular, white label casinos now face more difficulties than they did before. In particular, we should consider changing regulations. That’s the case not just in the UK, but also in many parts of mainland Europe. Thus, we could see similar trends emerge there too. Regulators on the continent appear to be taking a route of increased collaboration, along with learning from past mistakes and taking inspiration from one another’s regulatory measures. This can be reinforced by the likes of EveryMatrix ceasing their B2C operations in countries such as Denmark.
White label casinos probably won’t die out altogether. Instead, brands might choose to reduce how many they operate. Meanwhile, others will pick the B2B path. Those that do the latter of these will need to support casinos that continue operating, through more robust and innovative gaming solutions. This evolution will probably happen no matter what, but changing regulations could accelerate them.